Money Matters

IN THE CURRENT ECONOMIC environment, it comes as no surprise that some higher ed institutions are beginning to wonder whether a radical strategy like reducing sticker price would be the best way to maintain market share. This spring, deposits were lagging at many private IHEs, even at campuses where admit numbers were up. More families were appealing financial aid awards, and more institutions were responding to those appeals. Officials are concerned students may “melt away” before fall.

IN THE MEDIA, FINANCIAL aid coverage tends to focus on topics such as the tensions between funding merit scholarships versus need-based grants, the growth in student and parent borrowing, and the need to increase funding for Federal Pell Grants. Federal or state work-study programs get little focus.

MUCH HAS BEEN ANALYZED and written about the price sensitivity of new students, but an increasing number of institutions are beginning to think in a more data-driven way about how pricing and discounting decisions impact returning students as well.

FINANCIAL AID EXPENDITURES, influenced by a variety of factors, are not always easy to predict. Which admitted students will accept their offers? Which upperclassmen will return? What will happen to external aid sources? Will the admit pool percentage applying for aid change? Will family contributions keep pace with increases in charges?